As Profitability Improves, China's Operating Capacity Of Metallurgical-Grade Alumina Is Expected To Rebound In June

SMM News on May 30:

According to SMM data, China's metallurgical-grade alumina production in May 2025 (31 days) increased by 2.66% MoM and 4.06% YoY. As of month-end May, China's existing capacity for metallurgical-grade alumina stood at approximately 110.82 million mt, with actual operating capacity declining by 0.46% MoM and an operating rate of 77.3%.

Operating capacities of domestic alumina refineries varied in terms of increases and decreases during the month. Due to an overall decline in bauxite ore prices and a significant rebound in alumina prices, the profitability of alumina enterprises improved, leading to partial resumption of production at facilities that had undergone maintenance and production cuts earlier. Meanwhile, some new enterprises conducted maintenance and production cuts. Overall, China's alumina operating capacity declined slightly MoM in May.

By region:

In May, multiple alumina enterprises in southern Guizhou and Guangxi regions underwent maintenance and production cuts, resulting in a decline in operating capacity and operating rates that fell by 10.2 and 1.3 percentage points MoM, respectively.

In May, the production decline caused by earlier maintenance and production cuts in Shandong, Shanxi, and Henan regions was further reflected. Meanwhile, following improved profitability, some alumina capacities resumed production in May. Overall, the alumina operating rates in Shandong and Henan regions declined by 4.8 and 2.9 percentage points MoM, respectively, while the alumina operating rate in Shanxi region rebounded by 1.4 percentage points MoM.

Next month's forecast: As of May 30, according to SMM's daily cost-profit model calculations, the average profitability of the alumina industry exceeded 400 yuan/mt. It is expected that alumina capacities will gradually resume production and new capacities will be further released in June. Overall, China's operating capacity for domestic metallurgical alumina is expected to rebound to approximately 87.95 million mt/year in June.